Location Choice of a Partially–Private Monopoly Supplier

Q3 Economics, Econometrics and Finance

Studies in Microeconomics Pub Date : 2021-09-06 DOI:10.1177/23210222211032108

Doriani Lingga, D. Simanjuntak

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引用次数: 1

Abstract

This paper analyzes the location choice of an upstream monopolist who supplies input to asymmetric duopoly firms in a downstream market. The monopolist is partially private, in that it cares not only about its profit maximization but also about the survival of the downstream firms. Based on the Hotelling model, we find that the monopolist is always attracted to locate closer to the efficient downstream firm. In particular, when the efficiency difference between the two downstream firms is not too high, such that no firm is driven out of the market, the monopolist locates at a distance of 1/6 from the efficient firm in the line segment of unit length. Finally, considering the downstream firms’ survival, we show that the upstream monopolist charges a higher input price on the efficient firm. This study may be relevant to the product differentiation framework, in which firms can benefit from producing goods that are close to the preference of high-type consumers; to the pharmaceutical industry, in which pharmacy companies must cover a broad market segment; or to the policymaking process, in which policymakers may have an incentive to make a policy preferred by a particular group of the society. JEL Classifications: D42, L12, L230

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部分私有垄断供应商的区位选择

本文分析了上游垄断者在下游市场向非对称双寡头企业提供投入时的区位选择问题。垄断者是部分私有的，因为它不仅关心自己的利润最大化，而且关心下游企业的生存。基于霍特林模型，我们发现垄断者总是被吸引到更靠近高效下游企业的地方。特别是当两家下游企业的效率差不太高，没有企业被赶出市场时，在单位长度线段上，垄断者与效率企业的距离为1/6。最后，考虑下游企业的生存，我们证明了上游垄断者对高效企业收取更高的投入价格。该研究可能与产品差异化框架有关，在产品差异化框架下，企业可以从生产接近高类型消费者偏好的产品中获益;对于制药行业，制药公司必须覆盖广泛的细分市场;或者是政策制定过程，在这个过程中，决策者可能有动机制定一个社会特定群体更喜欢的政策。JEL分类:D42, L12, L230

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Studies in Microeconomics Economics, Econometrics and Finance-Economics, Econometrics and Finance (all)

CiteScore

1.40

自引率

0.00%

发文量

期刊介绍： Studies in Microeconomics seeks high quality theoretical as well as applied (or empirical) research in all areas of microeconomics (broadly defined to include other avenues of decision science such as psychology, political science and organizational behavior). In particular, we encourage submissions in new areas of Microeconomics such as in the fields of Experimental economics and Behavioral Economics. All manuscripts will be subjected to a peer-review process. The intended audience of the journal are professional economists and young researchers with an interest and expertise in microeconomics and above. In addition to full-length articles MIC is interested in publishing and promoting shorter refereed articles (letters and notes) that are pertinent to the specialist in the field of Microeconomics (broadly defined). MIC will periodically publish special issues with themes of particular interest, including articles solicited from leading scholars as well as authoritative survey articles and meta-analysis on the themed topic. We will also publish book reviews related to microeconomics, and MIC encourages publishing articles from policy practitioners dealing with microeconomic issues that have policy relevance under the section Policy Analysis and Debate.